Alerts

   George Ching

August 2, 2023. In light of the increase in our estimates for the power generation business, we are raising our 2023E net income forecast for AP by 16.5% to Php32Bil. We are also raising our FV estimate on AP by 1.2% to Php48.3/sh. We are maintaining our BUY rating on AP. We like AP as we believe that the earnings recovery from 2021 to 2022 can be sustained this year with overall power demand expected to remain strong. Furthermore, valuation is also cheap, trading at 8.3X FY23 P/E, compared to AP’s 10 year historical P/E of 13.7X. Based on its 2023 cash dividend of Php1.87/sh, this provides a decent dividend yield of 5.1%. The upside to our FV estimate is significant at 34%.

   George Ching

August 1, 2023. Maintaining BUY rating. In light of the increase in our 2023E earnings estimate, we are raising our FV estimate by 10.5% to Php436.7/sh. We are maintaining our BUY rating on MER.

   Denise Joaquin

July 31, 2023. We maintain our HOLD rating on WLCON with an FV estimate of Php27.6/sh. We will also be reviewing our estimates in light of the weaker-than-expected results.

   Charmaine Co

July 28, 2023. We are downgrading our recommendation on BPI from BUY to HOLD as the recent rally in its share price limits the upside to our FV estimate of Php111/sh, based on 1.55x 2023EP/BV. We like BPI as we expect to see sustained growth in the bank’s lending portfolio as the economy continues to recover and as the bank moves forward with its agency banking push. We also expect the bank to continue to benefit from its substantial lowcost deposit base as interest rates stay elevated. BPI’s upcoming merger with Robinsons Bank Corporation (RBC) should also provide it with opportunities to build new synergies with the Gokongwei group and further expand its business. Nevertheless, given the limited upside to our FV estimate, we recommend accumulating closer to the buy-below price of Php96.0/sh.

   Carlos Matthew De Leon

July 17, 2023. We are reiterating our BUY rating on TEL with a FV estimate of Php1,760/sh. We continue to like TEL for its leadership in the home broadband space. Its higher capture rate of revenue-generating subscribers from early May further reduces revenue loss risk after the implementation of the SIM registration law on July 25. The focus on free cash flow generation as capex trends down should also bolster the dividend outlook. At current prices, TEL is trading at 4.8x FY23E EV/EBITDA, a discount to its historical average of 5.5x. Current prices also imply an attractive dividend yield of 6.8% assuming 60% payout ratio on our more conservative telco core income forecast.

   Carlos Matthew De Leon

July 13, 2023. We are maintaining our BUY rating on CEB with a new FV estimate of Php55.0/sh from Php53.0/sh. We see a favorable macro backdrop underpinning domestic travel and the gradual recovery of international trade. Cost pressures easing should also support margins at least in the near-term. We note key risks to our view include (1) steep rise in oil prices as oil-producing states cut production (2) sharp depreciation of the peso, and (3) larger-than-expected impact of PW engine issue.

   Charles William Ang, CFA

July 12, 2023. We maintain our HOLD rating on UBP with an FV estimate of Php70.0/sh, based on 1.5x2023E P/BV ex-goodwill (or 0.95x 2023E P/BV inclusive of goodwill). We expect that the bank will continue to see growth in its lending business as the economy continues to recover and as it unlocks value from cross-sell opportunities to Citi clients. Nevertheless, upside to our target price remains limited.

   George Ching

July 4, 2023 - Rating under review. Our rating on MPI is currently under review pending the tender offer of the stock.

   Charles William Ang, CFA

June 23, 2023. We are adjusting our FV estimate to Php111.0/sh (based on 1.55x 2023E P/BV) to reflect the impact of the recently distributed property dividends on BPI’s outstanding shares. The bank paid out approx. 406Mil treasury shares as a result of the merger between BPI and BPI Family Savings Bank, Inc. Nevertheless, we are maintaining our BUY rating on BPI as we expect to see sustained growth in the bank’s lending portfolio as the economy continues to recover. Furthermore, BPI is one of the major beneficiaries of elevated interest rates, given its substantial low-cost deposit base. The bank’s upcoming merger with Robinsons Bank Corporation (RBC) will also provide it with opportunities to build new synergies with the Gokongwei group and thereby further expand its business.

   Carlos Matthew De Leon

June 9, 2023. Despite the reduction in forecasts, we are maintaining our BUY rating on CNVRG. At current prices, the stock is very cheap, trading at 5.2x our revised 2023E EV/EBITDA, below its historical average of 8.1x. Furthermore, plans to enter the prepaid fiber business to tap a bigger market could provide a new leg of growth. In our forecast, we only assumed minimal contribution of the said business (1.0% and 2.1% of residential revenues in 2023 and 2024).